Month: February 2017

I thought it was time for a more light-hearted article. We’ve been covering a lot of investing topics lately so I felt like a change of pace.

This article highlights the difference between frugal and cheap with regards to clothes purchases. Many people mistakenly think frugal and cheap are the same thing but they are not. Cheap is looking for the lowest cost with little consideration for anything else. Frugal is concerned with getting the best value. In fact, many people, including myself broaden this even more and think of being frugal as trying to get the maximum happiness for our spending.

Investing. Stocks. Risk. Fear. Return. Volatility. All of these terms go together. The so-called Risk vs Reward spectrum means that investors should rationally demand higher returns for riskier investments as compensation for bearing that risk. So ultra-safe US treasuries or cash accounts will have the lowest returns. Riskier investments like stocks, real estate, longer-term bonds, or various alternative investments should have higher returns (but also an increased chance of losing significant value). But the term risk is thrown about pretty loosely and is viewed differently by many people. So this article will delve into risk. Particularly risk in investing. I’ll use the stock market as an example since it is my primary vehicle for maintaining and growing my own long-term wealth and security. I believe it’s critical to understand this well for your long-term financial success, particularly in early retirement where you are likely to be dependent on investments to sustain your spending for 40-50+ years. As you understand this better, you’ll make better investing and allocation decisions and also be less likely to make poor short-term financial decisions. The vast majority of FIRE success stories involve people who understand this well. It’s worth learning.